Considering Faking Your Own Death? Then The Philippines Is The Place For You

The technical term is pseudocide - a fancy word that means, essentially, “faking your own death."

Hundreds of thousands of Americans - some struggling with seemingly insurmountable debt burdens or are being hounded by the IRS after stiffing the tax man - have probably fantasized about faking their own deaths. But few understand just how easy it is to - um - execute such an ambitious, if legally precarious, plan.

That’s where purveyors of so-called “death kits” come in. Few westerners are aware of its existence, but there’s actually a thriving cottage industry based in the Philippines, where investors can purchase all the tools they need to fake their own deaths for the surprisingly low price of about 350 pounds (about $500).

Of course, the scheme has several macabre elements. The process involves buying an unclaimed corpse from one of the many morgues in the Philippines where the bodies of John and Jane Does are stored.

According to the Telegraph, many customers who choose this route are desperate Wall Street bankers seeking to escape debt, and men having affairs who want to leave their families.

The Philippines has long been cited in official statistics as the foreign location with the highest number of American tourist deaths. But many of these fatalities are actually fraudulent, the result of desperate westerners faking their own deaths.

Take Elizabeth Greenwood, who “died” as a tourist in the Philippines in 2013. Multiple spectators witnessed her crash her rental car into another vehicle on a busy road in Manila, and doctors at the local hospital pronounced Greenwood dead on arrival - or so her death certificate would have you believe...

Greenwood, who was inspired to fake her own death by her ballooning student debt, is now working as a journalist in New York City after deciding at the last minute that she didn’t want to go through with the scheme.

She first stumbled upon the idea during lunch with a friend who joked about it after she finished ranting about the colossal size of her student debt. But the joke got her thinking. So she started Googling.

“I began poking around online and discovered that death fraud truly is an industry with a whole host of experts and consultants to help you go through with it, and that there are far more people than you might imagine who had done it themselves, with varying degrees of success,” Greenwood explains.

She eventually stumbled on a Wall Street Journal article from the 1980s that referenced “a southeast Asian country” where morgues pick up the bodies of derelicts and freeze them to help customers commit death fraud for insurance purposes.

Greenwood then discovered two elite private investigators, Steven Rambam and Richard Marquez, who consult for life insurance companies seeking to stamp out death fraud.

“Again and again, they named the Philippines as a hotbed for the kind of theatrical death fraud that involves false corpses,” she adds. “They sniff out life insurance fraud all over the globe - it is attempted everywhere - but they told me some memorable stories about cases they’d worked on in the Philippines, so I wanted to check it out myself."

The cost of death fraud can vary widely. A fake death certificate from the Philippines generally costs anywhere in the region of £100 to £350. Some will pay upwards of £20,000 to hire a professional fixer who will help them scratch their trail as they move forward with a new identity.

During a week-long stay in the Philippines, Greenwood found a pair of locals there who obtained a fake death certificate for her from a mole working inside a government agency. All the witness accounts were fake, and there was never a fatal traffic accident as outlined on the papers.

She never crossed the line and actually filed the documents with the US embassy.

“My death certificate sits encased in a plastic sheath at the bottom of my filing cabinet,” Greenwood states.

The difficulty of feigning one’s death depends on the purpose of the fraud. If one is trying to cash in a life insurance policy, then the fraud will require a body and an accomplice, since, without a body, most insurers will wait seven years before paying out a claim. This is why the cottage industry of fake morgues has sprung up.

Some fraudsters might go to the lengths of staging a funeral for their dummy corpse and filming it to submit to the insurance company, she adds, but in most cases, this is an unnecessary flourish.

If insurance fraud isn’t your ultimate aim, then the process of faking your death will be exponentially easier.

“If you’re not committing life insurance fraud, you needn’t go to all the extra trouble,” Greenwood told the Telegraph. “Staging a more open-ended, elegant escape, like disappearing while on a hike, usually looks more believable to investigators."

While insurance companies typically hire private investigators to sniff out death fraud, few cases are ever prosecuted, particularly if they were committed on foreign soil. Often, the only punishment for death fraudsters is their insurance claim being denied.

Greenwood cites one example of a German woman who faked her death and whose fraud remained undiscovered for two decades.

When German authorities discovered she was alive in 2015, after being presumed dead since 1985, the only penalty she shouldered was the trouble of filling out the paperwork necessary to declare herself still alive.

Death fraud happens “constantly”, Greenwood said adding that she detected a spike in cases around the financial crisis.

But while faking one’s death on foreign soil is easier than many believe, the reasons people get caught are also simpler than many might assume.

Particularly if an accomplice is battling it out with an insurance company, fraudsters are typically caught when they try to reach out to loved ones or their parents.

As it turns out, even if they’re dead on paper, many people just can’t cut the ties to their old lives.
 

Shutdown Imminent? Bitter Divisions Remain As Lawmakers Scramble To Pass Funding Bill

Lawmakers are just two days away from the expiration of the continuing resolution that"s been funding the government for the last two months, and yet many battles over a host of intractable issues are still being fought. At this point, passing something by midnight Friday - when the continuing resolution expires -is looking increasingly problematic.

Adding to the uncertainty are reports that President Donald Trump believes a shutdown could be spun as a political victory for Republicans by blaming it on the Democrats (it worked for Obama) - remarks that would seem to invalidate Mitch McConnell’s declaration that a shutdown “just isn’t going to happen."

Looming largest over negotiations is the fate of former President Obama’s DACA program - which is set to expire in March thanks to a Trump executive order. Most - but not all - Democrats want language preserving DACA attached to the funding bill - as a preliminary deal struck between Trump and “Chuck and Nancy” back in September had stipulated. Many Republicans - even many of those who ultimately support preserving DACA - feel it shouldn’t be attached to the spending bill.

Aside from preserving DACA, there are two other legislative priorities that Democrats and some moderate Republicans are fighting to include in the spending bill: An extension of a popular child health-insurance program, and a provision that would preserve federal cost-sharing payments to insurance companies for a couple of years.

Meanwhile, some conservatives are objecting to the two-week timeline favored by the Republican leadership, arguing that such a short timeline would give lawmakers more leverage to push for favors by threatening to make problems by holding tax reform hostage - something Republicans have promised to pass by the end of the year.

Here’s RealClearPolitics:

Democrats, and several dozen moderate Republicans, want to see a legislative solution for immigrants who came to the United States illegally as children -- known as “Dreamers” -- before the end of the year. Democrats and some Republicans in the Senate also hope to pass bipartisan legislation to shore up the Affordable Care Act marketplace, and lawmakers hope to reauthorize the Children’s Health Insurance Program. Also lingering are the expiring federal flood insurance program, and another round of disaster relief money for areas damaged by hurricanes.

As the Hill points out, many Democrats would refuse to support a spending bill unless it includes the protections for undocumented immigrants who were brought here as children.

Sens. Elizabeth Warren (D-Mass.), Kamala Harris (D-Calif.), Cory Booker (D-N.J.) and Bernie Sanders (I-Vt.), all prospects to run for president in three years, say they won’t vote for a year-end funding bill while these immigrants face the threat of deportation.

“I have been clear,” Harris said on the Senate floor Tuesday afternoon, noting the looming deadline to fund the government. “Any bill that funds the government must also include a fix for” the young immigrants.

Members of the Congressional Hispanic Caucus have also warned they would oppose spending legislation unless some concessions are made to protect these so-called Dreamers.

Unsurprisingly, red-state Democrats are somewhat less enthusiastic about preserving DACA.

But vulnerable Democrats running for reelection next year in states that President Trump won don’t want any part of that strategy. They are aiming to show swing voters who backed Trump that they’re willing to work with Republicans when it makes sense.

 

“I think it’s stupid talk. You don’t want to shut the government down. That’s not where I’m going to be,” said Sen. Jon Tester. Tester said he wants the Dreamers taken care of, but “you don’t shut the government down."

The Democrats’ leaders in Congress have been wary of appearing to threaten a shutdown lest it makes them look like they’re willing to fight for their principles - something the Democratic Party brain trust apparently believes could hurt Democrats’ chances in next year’s midterms.

Like the original agreement with Trump, Schumer ultimately expects Democrats to reach a deal with Republicans that will offer some border-security concessions in exchange for preserving DACA.

The party’s top leaders, Senate Democratic Leader Charles Schumer (N.Y.) and House Democratic Leader Nancy Pelosi (Calif.), have assiduously avoided threats of a government shutdown, knowing it could put some of their colleagues in a tough spot.  Schumer downplayed the prospect of Democrats blocking a spending measure to force Republicans to replace the Deferred Action for Childhood Arrivals (DACA) program that President Obama created in 2012 to halt deportations for certain young immigrants who came to the country illegally as children.

 

“We don’t think we’re going to get to that. There are good negotiations occurring between Democrats and Republicans to come up with a good DACA program, as well as some good border security,” he said Tuesday after a meeting of the Democratic caucus.

According to Bloomberg, conservatives angling for a funding extension until Dec. 30 argue that would give them more leverage over spending demands from Democrats as well as the promises of potentially costly legislation made in the Senate. They also want to use the time to secure more money for the Pentagon.

“You’ve got the major part of our conference making sure our war fighters are taken care of,” said Mark Walker, a North Carolina Republican who chairs the 170-member Republican Study Committee. “But right behind that number you’ve got the fiscal hawks who want to control mandatory spending."

Stocks and yields were slightly lower Wednesday, while the yield on the short-term T-bill that comes due next week trimmed some of its rise but remained just below its highs from earlier in the week.

Still, several lawmakers are insisting that they won’t let the government shutdown. Is that because they fear Trump is right and that a shutdown could endanger Democrats, especially Democrats from red states, during next year’s election?

We’ll need to wait and see.

Signs Of The Top? Chinese Demand For 10x Levered Structured Products Surges In US... Again

In the run up to the "great recession" of 2008/2009, it was unsuspecting European and Asian buyers that supplied the marginal capital required to turn America"s plain vanilla, fed-induced housing bubble into a turbo-charged, global financial time bomb by indiscriminately scooping up highly-levered structured mortgage products with absolutely no idea what was behind those products.

Now, it seems that China"s lust for levered returns in U.S. structured products has returned and is focused this time around on the CLO market.  Per Bloomberg: 

Now, a new set of buyers from China are hoping things turn out differently. Instead of snapping up packages of risky derivatives tied to U.S. home loans, they’re buying collateralized loan obligations that bundle together corporate loans to highly leveraged companies. And while such CLOs weathered the last crisis relatively well, there’s already concern that these investors are being tempted to deploy leverage to amplify their returns.

 

On a recent trip to China, potential new investors expressed interest in the idea of applying leverage for the purchase of CLOs, even at the riskier BB level, Chan said. He estimates levered returns for the BB-rated CLO slice may be almost 20 percent. Leverage is employed using the repo financing market, where short-term loans allow investors to borrow money by lending securities.

 

"Over the last 18 months, Chinese investors have shown a marked increase in interest, awareness, and desire to be educated about CLOs, and they’re a pretty sophisticated audience,” said John Popp, global head and chief investment officer of the Credit Investments Group at Credit Suisse Asset Management. The company has $46 billion in assets under management, including CLOs that have a market value of $18.3 billion.

 

“They’ve really learned the product quickly and engage in extensive due diligence,” Popp said. “I expect to see them as steady and growing participants in the CLO market, not as tourists.”

Even though Chinese investors have yet to enter the CLO market en masse, Mitsubishi UFJ believes they could effectively double the demand for CLO new issues in a matter of just 5 years.

In some cases, investment banks and CLO managers have made as many as five trips to Asia this year, adding on special CLO-focused investor conferences in mainland China for the first time ever to raise the product’s profile. The demand to diversify into dollar assets has grown from a wide range of investors, despite Chinese-government capital controls limiting deployment of capital abroad.

 

While Japanese, Korean, Singaporean and Taiwanese investors have been buyers of U.S. CLOs for many years -- even pre-crisis deals, in the case of Japan and Korea -- mainland China is still a relatively nascent, untapped market.

 

“Mainland China is the last market for us to focus on, and we’ve been there four times already this year,” CIFC’s Wriedt said.

 

In contrast to other Asian investors, the Chinese are more willing to invest deeper down the capital structure, or even in the riskiest equity piece.

 

The Chinese investor base for CLOs may be equal to the U.S. in five years’ time if capital controls are relaxed, MUFG’s Khan said. More than $106 billion of new U.S. CLOs have priced so far this year, and the vast majority of investors are still U.S.-based. Potential Chinese investors include quasi-sovereign or insurance companies, so "even a small percentage of what they will do will lead to a large capital infusion," Khan said.

Of course, not everyone is convinced that investing in 10x levered structured products is such a great idea with yields on highly-levered bank debt hovering around all-time lows...

“It wouldn’t be wise for the Chinese to use leverage at this stage,”
said Asif Khan, head of CLO origination and distribution at MUFG. “It’s

dangerous territory. Leveraging BB-rated bonds - is that a good idea?

Any potential use of leverage by Chinese investors could pose potential

risk in case of severe volatility.”

...but what"s the worst that can happen?  It"s not as if Lehman Brothers can liquidate again...

Is A Saudi-Israeli Friendship Driving The Rest Of The Middle East Together?

Authored by Federico Pieraccini via The Strategic Culture Foundation,

Through its top official, Prince Mohammad bin Salman (MBS), Saudi Arabia continues a wave of internal arrests, having seized nearly $800 billion in assets and bank accounts. A few days later, MBS attempted to demonstrate his authority by summoning Lebanese Prime Minister Saad Hariri to Saudi Arabia, where he was forced to resign on Saudi state TV. Trump tweeted support for Bin Salman"s accusations against Iran and Hezbollah, and the future Saudi king even obtained Israel"s secret support. Iran, meanwhile, denies any involvement in Lebanon"s domestic affairs or involvement with the ballistic missile launched by Houthi rebels towards Riyadh’s King Khalid International Airport a few days ago. Meanwhile, Trump, Putin and Xi met recently and seem to have decided the fate of the region in an exercise of realism and pragmatism.

News that upends the course of events has now become commonplace over the last few months. However, even by Middle East standards, this story is something new. The affair surrounding Lebanon’s Prime Minister Hariri generated quite a bit of commotion. Hariri had apparently been obliged to announce his resignation on Saudi Arabia"s Al Arabiya news channel while being detained in Riyadh. His most recent interview seemed to betray some nervousness and fatigue, as one would expect from a person under enormous stress from forced imprisonment. In his televised resignation statement, Hariri specified that he was unable to return to Lebanon due to some sort of a threat to his person and his family by operatives in Lebanon of Iran and Hezbollah. The Lebanese security authorities, however, have stated that they are not aware of any danger faced by Hariri.

In an endless attempt to regain influence in the Middle East, Saudi Arabia has once again brought about results directly opposite to those intended. Immediately after receiving confirmation that the resignation had taken place in Saudi Arabia, the entire Lebanese political class demanded that Hariri return home to clarify his position, meet with the president and submit his resignation in person. Saudi actions have served to consolidate a united front of opposition factions and paved the way for the collapse of Saudi influence in the country, leaving a vacuum to be conveniently filled by Iran. Once again, as with Yemen and in Syria, the intentions of the Saudis have dramatically backfired.

This Saudi interference in the domestic affairs of a sovereign country has stirred up unpredictable scenarios in the Middle East, just at the time that tensions were cooling in Syria.

Hariri"s detention comes from far away and is inextricably linked to what has been happening over the past few months in Saudi Arabia. Mohammed bin Salman, son of King Salman, began his internal purge of the Kingdom’s elite by removing from the line of succession Bin Nayef, a great friend of the US intelligence establishment (Brennan and Clapper). Bin Nayef was a firm partner of the US deep state. Saudi Arabia has for years worked for the CIA, advancing US strategic goals in the region and beyond. Thanks to the cooperation between Bandar bin Sultan Al Saud, Bin Nayef, and US intelligence agencies, Washington has for years given the impression of fighting against Islamist terrorist while actually weaponizing jihadism since the 1980s by deploying it against rival countries like the Soviet Union in Afghanistan, the Iraqi government in 2014, the Syrian state in 2012, and Libya’s Gaddafi in 2011.

MBS has even detained numerous family-related princes, continuing to consolidate power around himself. Even Alwaleed bin Talal, one of the richest men in the world, ended up caught in MBS’s net, rightly accused of being one of the most corrupt people in the Kingdom. It is speculated that family members and billionaires are detained at the Ritz Carlton in Riyadh, with guests and tourists promptly ejected days before the arrests began. Mohammed bin Salman’s actions are not slowing down, even after seizing $800 billion in accounts, properties and assets.

MBS is intensifying his efforts to end the conflict in Yemen, which is a drain on Saudi finances, lifting the naval blockade of the Port of Aden. Not only that, the two main Syrian opposition leaders, Ahmad Jarba and Riyadh Hijab, have been arrested by Riyadh in an effort to demonstrate to Putin the good will of MBS in seeking to resolve the Syrian conflict. Not surprisingly, King Salman, in a frantic search for a solution to the two conflicts that have lashed his reputation as well as the wealth and alliances of the Saudi kingdom, flew to Moscow to seek mediation with Putin, the new master of the Middle East.

MBS has undertaken an anti-corruption campaign for international as well as domestic purposes. At the national level, the collapse of oil prices, coupled with huge military spending, forced the royal family to seek alternatives for the future of the Kingdom in terms of sustainability, earnings and profits. MBS’s Vision 2030 aims to diversify revenue in order to free Saudi Arabia from its dependence on oil. This is a huge ask for a nation that has been thriving for seventy years from an abundance of resources simply found under its ground. This delicate balance of power between the royal family and its subjects is maintained by the subsidies granted to the local population that has allowed the Kingdom to flourish in relative peace, even during the most delicate periods of the Arab Spring in 2011. There is an underlying understanding in Saudi Arabia that so long as the welfare of the population is guaranteed, there should be no threat to the stability of the royal family. It is no wonder that after losing two wars, and with oil prices at their lowest, MBS has started to worry about his future, seeking to purge the elites opposed to him.

The Kingdom’s reality is quickly changing under MBS, the next Saudi king, who is trying to anticipate harder times by consolidating power around himself and correcting his errors brought on by incompetence and his excessive confidence in the Saudi military as well as in American backing. The ballistic missile that hit Riyadh was launched by the Houthis in Yemen after 30 months of indiscriminate bombing by the Saudi air force. This act has shown how vulnerable the Kingdom is to external attack, even at the hand of the poorest Arab country in the world.

In this context, Donald Trump seems to be capitalizing on Saudi weakness, fear, and the need to tighten the anti-Iranian alliance. What the American president wants in return for support of MBS is as simple as it comes: huge investments in the US economy together with the purchase of US arms. MBS obliged a few months ago, investing into the US economy to the tune of more than $380 billion over ten years. Trump"s goal is to create new jobs at home, increase GDP, and boost the economy, crucial elements for his re-election in 2020. Rich allies like Saudi Arabia, finding themselves in a tight fix, are a perfect means of achieving this end.

Another important aspect of MBS’s strategy involves the listing of Aramco on the NYSE together with the switch to selling oil for yuan payments. Both decisions are fundamental to the United States and China, and both bring with them a lot of friction. MBS is at this moment weak and needs all the allies and support he can get. For this reason, a decision on Aramco or the petroyuan would probably create big problems with Beijing and Washington respectively. The reason why MBS is willing to sell a small stock of Aramco relates to his efforts to gin up some money. For this reason, thanks to the raids on the accounts and assets of the people arrested by MBS, Saudi Arabia has raised over $800 billion, certainly a higher figure than any sale of Aramco shares would have brought.

This move allows MBS to postpone a decision on listing Aramco on the NYSE as well as on whether to start accepting yuan for payment of oil. Holding back on the petroyuan and Aramco’s initial public offering is a way of holding off both Beijing and Washington but without at the same time favouring one over the other. Economically, Riyadh cannot choose between selling oil for dollars on the one hand and accepting payment in another currency on the other. It is a nightmare scenario; but some day down the road, the Saudi royals will have to make a choice.

The third party to this situation is Israel in the figure of Netanyahu, Donald Trump"s great friend and supporter right from the beginning of his electoral campaign. Trump"s victory brought positive returns to the investment the Israeli leader had made in him. Ever since Trump won the election, the US has employed harsh words against Iran, turning away from the positive approach adopted by Obama that managed to achieve the Iran nuclear deal framework. Nevertheless, the Israeli prime minister has had to deal with numerous problems at home, with a narrow parliamentary majority and several members of his government under investigation for corruption.

Donald Trump pursued a very aggressive policy against Tehran during the election campaign, then went on to annul the Iran nuclear deal a few weeks ago. The decision is now for Congress to certify, with a difficult mediation between European allies (other than China and Russia), who are opposed to ending the deal, and the Israelis, who can count on the support of many senators thanks to their lobbying efforts. Israel, for its part, sees in Saudi Arabia and MBS the missing link between Saudi Wahhabism and Israeli Zionism. Various private cablegrams leaked to the press have shown how Israeli diplomats around the world were instructed to support Saudi  accusations of Iran interfering in Lebanon"s internal affairs.

The interests of MBS and Netanyahu seem to dovetail quite nicely in Syria and Yemen as well as with regard to Iran and Hezbollah. The two countries have a common destiny by virtue of the fact that neither alone can deal decisively with Hezbollah in Syria or Lebanon, let alone Iran. Rouhani himself has said that Iran fears American strength and power alone, knowing that Saudi Arabia and Israel are incapable of defeating Tehran.

Trump"s approval of the arrests carried out by MBS is based on a number of factors. The first involves the investments in the economy that will be coming America’s way. The other, certainly less known, concerns the subterranean battle that has been occurring between the Western elites for months. Many of Clinton’s top money sources are billionaires arrested by MBS, with stock options in various major banks, insurance companies, publishing groups, and American television groups, all openly anti-Trump. In this sense, the continuation of Trump"s fight with a portion of the elite can be seen with the halting of the merger of AT&T and Time Warner involving CNN.

Trump seems to be accompanying Saudi and Israeli urgings for war with multiple intentions, potentially having a plan for a broader, regional and global agreement between the parties.

At a regional level, Trump first supported the Saudi crusade against Qatar, resolved with Riyadh not getting Qatar to accede to any of its advanced demands. During the crisis, Doha approached Tehran and Moscow, who immediately took advantage of the situation to establish trade relations and commence negotiations with Qatar to tame its terrorist influence in the region, especially in the Syrian conflict. Turkey and Qatar have practically announced a military alliance, cementing a new front that includes China, Russia, Iran, Turkey, Syria, Lebanon, Iraq, and Qatar, now potentially all on the same side of the barricades, opposed to Saudi dictates and Israel’s efforts to foment war with Iran.

With the US withdrawal from the region, as is increasingly evident from Trump"s reluctance to embark on a Middle East conflict, Israel and Saudi Arabia are increasing their desperate cries against Iran, observing how the gains of the resistance axis have led Tehran to dominate the region with its allies. The visit of King Salman to Russia, and the four meetings between Putin and Netanyahu, give the idea of which capital is in charge in the region. This all represents an epochal change that further isolates Riyadh and Tel Aviv, two countries that represent the heart of chaos and terror.

The Saudi attempt to isolate Qatar has failed miserably, and the continuous effort to paint Iran as the main cause of tension in the region seems to have reached a point of no return, with the latest stunt involving Hariri. Sunnis, Christians and Shiites agree on one point only: that the premier must return home. Riyadh hopes to light the fuse of a new civil war in the region, with Israel hoping to take advantage of the chaos brought about by an attack on Hezbollah. This is not going to happen, and the disappointment of the House of Saud and the Israeli prime minister will not change anything. Without a green light from Washington and a promise from Uncle Sam to intervene alongside his Middle East allies, the Israelis and Saudis are aware that they have neither the means nor strength to attack Iran or Hezbollah.

Trump is playing a dangerous game; but there seems to be some degree of coordination with the other giants on the international scene. The main point is it is impossible for Washington to be an active part in any conflict in the region, or to change the course of events in a meaningful way. The "End of history" ended years ago. US influence is on the decline, and Xi Jinping and Putin have shown great interest in the future of the region. In recent months, the Russian and Iranian militaries, together with the Chinese economic grip on the region, have shown a collective intention to replace years of war, death and chaos with peace, prosperity and wealth.

MBS and Netanyahu are having a hard time dealing with this new environment that will inevitably proclaim Iran the hegemon in the region. Time is running out for Israel and Saudi Arabia, and both countries are faced with enormous internal problems while being unable to change the course of events in the region without the full intervention of their American ally, something practically impossible nowadays.

The new course of the multipolar world, together with Trump’s America First policy, seems to have hit hardest those countries that placed all their bets on the continuing economic and military dominance of the United States in the region. Other countries like Qatar, Lebanon and Turkey have started to understand the historical change that is going on, and have slowly been making the switch, realizing in the process the benefits of a multipolar world order, which is more conducive to mutually beneficial cooperation between countries. The more Saudi Arabia and Israel push for war against Iran, the more they will isolate themselves. This will serve to push their own existence to the brink of extinction.

"Helpless, Raging" Charlottesville Families Shocked By These 2018 Obamacare Premiums..."It"s Horrific"

Over the past several months, Democrats have jumped on every opportunity possible to blame the Trump administration for yet another year of staggering Obamacare premium increases.  Ironically, despite arguments from the Left that Trump"s defunding of Obamacare"s marketing budget would cause 2018 signups to plunge, as Politico recently noted, they"re actually up in 2018...which begs the question: was the Obama administration just wasting $100 million a year in taxpayer money for nothing?  Shocking thought, we know.

Meanwhile a fresh barrage of outcries from Democrats, most notably Ms. Nancy Pelosi, came after Trump"s decision to cut federal subsidies, an action which the CBO insisted could result in devastating premium increases of up to 20%.

Of course, if Trump is responsible for 20% of Obamacare"s premium hikes in 2018, then perhaps Nancy Pelosi should explain to the Dixon family in Charlottesville, VA precisely who is responsible for the other portion of the 235% premium hike they just received. 

As the Washington Post points out this morning, the Dixons, a family of 4 in Virginia, were shocked earlier this month to find that their Obamacare premiums were going to surge from roughly $900 per month in 2017 to over $3,000 per month in 2018.

Ian Dixon, who left his full-time job in 2016 to pursue an app-development business, did so because the ACA guaranteed that he could still have quality coverage for his young family, he said.

 

But when the 38-year-old Charlottesville husband and father of a 3- and a 1-year-old went to re-enroll this month, his only choice for coverage would cost him more than $3,000 a month for his family of four, which amounted to an increase of more than 300 percent over the $900 he paid the year before. And this is for the second-cheapest option, with a deductible of $9,200.

 

“Helpless is definitely a good word for it,” Dixon said. “Rage is also a good word for it.”

Of course, Democrats and the MSM also applauded Obamacare"s "great success" earlier this year when several counties that were previously feared to be left with no coverage options in 2018, suddenly picked up a carrier.  That said, perhaps Bloomberg, Reuters, NBC, etc. should reconsider just how meaningful these Obamacare monopolies are if the premiums charged are so high that no one can afford them anyway...

Earlier this year, Aetna and Anthem pulled out of the Albemarle market, citing too much unpredictability and risk. A smaller carrier, Optima, came in to fill the void. Consumers in the area went from having 19 plans offered in the options from Aetna and Anthem to only five coverage options with Optima.

 

Several factors led to Optima’s offering such high-priced plans, said Michael Dudley, the president of Optima.

 

First, small communities like Charlottesville tend to be pricier to cover because there is a small patient pool to balance out risks. So Optima took a cue from the carriers who had already ditched the market when actuaries predicted it was a place where the insurance companies might be paying out more to cover claims than it receives in premiums.

 

It is also a more expensive coverage area because the primary provider is University of Virginia Health System, an academic medical center that charges higher rates for its care than a community hospital. Optima will include UVA Health System in-network, unlike many carriers who have dropped the big medical centers as a cost-saving measure.

...perhaps local business owner Shawn Cossette can provide the Obamacare cheerleaders within the media some helpful insights...

Among them was Shawn Marie Cossette, 55, who runs her own event and floral design business in Charlottesville. Last year, she purchased an Anthem silver plan for $550 a month for herself. This year, under Optima, a silver plan would cost her $1,859 monthly.

 

“It’s a huge percentage of my income,” she said. “I really believed in the ACA. I really feel everyone deserves the right to health insurance, but who can afford those prices if you don’t qualify for subsidies?”

BOE Warns Weekly Fund Redemptions Of 1.3% Would Break Corporate Bond Market

The Bank of England has done some timely and truly eye-opening research into the resilience of corporate bond markets. The research is contained in the Bank of England Financial Stability Paper No.42 and is titled “Simulating stress across the financial system:  the resilience of corporate bond markets and the role of investment funds” by Yuliya Baranova, Jamie Coen, Pippa Lowe, Joseph Noss and Laura Silvestri.

The starting point of the analysis is to revisit the Global Financial Crisis (GFC) which saw $300 billion of related to subprime mortgages amplified to well over $2.5 trillion of write-downs across the global financial system as a whole. One of the problems was that the system was structured in a way that did not absorb economic shocks, but amplified them. The amplification came via a feedback loop. As the crisis unfolded, fears about credit worthiness of banks led to the collapse of interbank lending. Weaker banks had their funding withdrawn, which led to a downward spiral of asset sales and the strangling of credit in the broader economy.

The paper notes that, since then progress has been made and the Bank of England’s stress tests now include the feedback loop created by interbank loans.

Indeed, the 2016 test showed that the potential for solvency problems to spread between UK banks through this channel has “fallen dramatically” since the crisis. Furthermore, interbank lending has been cut back and is more often secured against collateral.

The report cautions that other feedback loops might be present, especially since banks only account for about half of the UK financial system. Indeed, a key objective for regulators is to assess how the non-bank part of the system – termed “market-based finance” in the paper, responds to economic shocks. In particular, could the non-bank system, which trades “market-based finance” (principally bonds), amplify shocks in a similar way to the banking system during the last crisis? The report characterises market-based finance and the related risks as follows.

The system of market-based finance includes, among other parts, investment funds, dealers, insurance companies, pension funds and sovereign wealth funds. It supports the extension of credit and transfer of risks through markets rather than banks. It has expanded rapidly since the crisis.  At the global level, assets held by non-bank financial intermediaries increased by more than a third since the financial crisis. The potential spillover effects in market-based finance centre on ‘fire sales’ of assets, which affect prices of financial assets and functioning of markets.  Participants in this part of the system can face incentives, or be forced into, sudden asset sales.

The report sees the potential for another dangerous feedback loop developing from falling asset prices which lead to declines in net worth, prompting a withdrawal of funding which leads to more asset sales and further falls in prices. They are hardly reinventing the wheel here and what they’re really describing is the evidence that investors often behave pro-cyclically. It raises the valid concern that pro-cyclical behaviour is most dangerous in less liquid assets with short-notice redemption – the classic liquidity mismatch. The post-Brexit problem in 2016 in UK commercial property funds was a great example.

These dynamics were illustrated clearly in 2016 in funds investing in UK commercial property.  With the property market in hiatus following the United Kingdom’s referendum on membership of the European Union, these open-ended funds faced redemption requests from investors concerned about the prospect of future price falls and fearing that other redemptions would force the funds to suspend.  The process was self-fulfilling and many funds were forced to suspend redemptions.

The report goes on to highlight the challenges for broker-dealer liquidity and hedge funds if asset managers aggressively sell securities in a crisis. It’s obvious stuff, i.e. that broker-dealer are less able to warehouse securities and less able to provide funding to hedge funds, which might be buyers, and could become forced sellers. The BoE models what would have when one type of shock - redemptions by open-ended funds - trigger selling by the funds with spillover effects for broker-dealers and hedge funds.

The paper that follows seeks to model how the aggregate behaviour of several sectors within the system of market-based finance, including investment funds and dealers, could interact to spread and amplify stress in corporate bond markets.  That focus stems from the growing importance of bond markets to the financing of the economy, alongside the rapid growth in holdings of such bonds in fund structures.  It does not focus on individual companies; the analysis is conducted at a sector level.  It is not concerned with the capacity of the sectors to absorb losses.

Basically, the model estimates the sensitivity of investment grade corporate bonds yields in Europe if funds sell the equivalent of 1% of their total assets on a weekly basis – which was similar run rate to the redemptions in October 2008 (4.2% over the month – see below). Since then, however, broker-dealer capacity has contracted and investment grade issue issuance risen sharply. Importantly, it also addresses the scale of redemptions which might overwhelm the ability of broker-dealers and hedge funds to absorb the selling. The model assumes that there is a shock leading to an initial round of redemptions which prompts investment funds to make asset sales. Broker-dealers require lower prices to compensate them for absorbing the selling which leads to a second round of redemptions and selling. After that, further selling “breaks” the market and leads to dislocated prices on the downside.

 

The paper explains the market-breaking points as follows.

The level of redemptions at which the second-round price impact line ends is where dealers reach the limit of their capacity to absorb those asset sales by funds not purchased by hedge funds.  We assume that market liquidity is tested at this point and refer to it as the market-breaking point. Transactions could still occur beyond this point — for example, if a dealer can immediately match a buyer and seller or if it sells other assets to purchase corporate bonds — but are assumed to take place at highly dislocated prices.  

Conclusion:
The BoE paper estimates that a weekly level of redemptions from funds equivalent to 1% of their assets would increase investment grade corporate bond yields by 40 basis points. However…this is the key…it estimates that initial redemptions equivalent to only 1.3% of assets on a weekly basis would be “needed to overwhelm the capacity of dealers to absorb those sales, resulting in market dysfunction”, i.e. the market-breaking point. It describes this as an “unlikely but not impossible event.”

We disagree, we are in a far bigger bubble than 2007-08.

Next Phase Of Carmageddon: The Banks

Authored by Wolf Richter via WolfStreet.com,

Banks have started to tighten lending standards for prime and subprime borrowers, and it shows...

Banks are further tightening their lending standards for prime and subprime auto loans. This process started in Q2 2016, when auto lending had reached the apogee of loosey-goosey underwriting that had boosted sales of new and used vehicles to record levels and had ballooned auto loan-balances outstanding to the $1-trillion mark. It also boosted risks for lenders. Inevitably, subprime auto loans started running into trouble in 2016, and it was time to not throw the last trace of prudence into the wind entirely.

The chart below - based on data from the Fed’s Senior Loan Officer Survey on bank lending practices for the third quarter - shows the net percentage of banks tightening lending standards. The negative percentages below the red line signify net easing. It shows how loan officers have gradually, in fits and starts, dialed back their easing before Q2 2016 and ratcheted up their tightening after Q2 2016:

During Q3 2017, 10% of the banks tightened underwriting conditions, compared to the prior quarter, but 0% loosened underwriting conditions. In other words, the tightening is proceeding gradually, on a bank-by-bank basis, and the easing has stopped entirely.

“Banks reportedly tightened most terms surveyed for auto loans,” the report says. Specifically, here are some of the terms the banks tightened in Q3, which adds to the banks that tightening in prior quarters:

• 7% net tightened conditions on minimum required down payments.


• 5% net tightened conditions on credit scores


• 8% net tightened granting loans to customers that did not meet credit scoring thresholds

In a set of special questions, the October survey asked why banks were changing credit standards or terms for prime and subprime borrowers “this year.” The reasons were nearly the same for both prime and subprime borrowers, but subprime is clearly the bigger concern. Here is what banks said about their reasons for tightening lending standards for subprime borrowers:

• Less favorable or more uncertain economic outlook: 50% somewhat important; 30% very important.


• Deterioration or expected deterioration in the quality of your bank’s existing loan portfolio: 30% somewhat important; 40% very important.


• Reduced tolerance for risk: 30% somewhat important; 50% very important.


• Less favorable or more uncertain expectations regarding collateral values [used vehicle values]: 40% somewhat important; 40% very important.


• Lower or more uncertain resale value for these loans in the secondary market: 33% very important; 0% somewhat important.

Some of this tightening is already showing up in the data. For example, the average maturity of new-vehicle loans peaked in Q1 2017 at 67.4 months, according to Federal Reserve data. The data for Q3 is not yet available, but by Q2 the average maturity dropped to 66.5 months, the first major drop since 2011.

Note on the left side of the chart how the average maturity plunged during the Financial Crisis as credit was freezing up and as auto sales collapsed, and it was hard to get anything financed:

But the tightening hasn’t yet shown up in total auto loan balances outstanding, which jumped by $19 billion during the third quarter, likely boosted by the first batch of replacement sales from the hurricanes.

What has shown up is a massive adjustment of the data going back to Q4 2015. Since I keep the old data, I overlaid the prior unadjusted data (red line) and the current adjusted data (blue columns) in the chart below. The adjustment retroactively wiped out $39 billion in auto loan balances in Q4 2015. By Q1 2017, the adjustment had wiped out $41 billion:

Adjustment of data happens all the time. These are estimates that can be off, and occasionally, adjustments are made to try to put them back on track. But it does show that auto loans did not suddenly plunge in Q4 2015, as the chart based on the blue columns alone would have otherwise indicated.

That banks are tightening their auto-lending standards ever so gradually is another headwind the auto industry is facing. The hurricanes, by destroying or damaging a few hundred thousand vehicles, created some temporary replacement demand for new and used vehicles, some of it financed by insurance companies.

This replacement demand is now papering over the underlying problems of the industry that are constraining demand:

• Too much auto debt


• Too much “negative equity” in vehicles after years of loosey-goosey lending, which makes trading difficult


• New vehicle prices that have moved out of reach


• And incomes that have been stagnating for a large part of the population.

And these headwinds will still be there after the replacement demand from the hurricanes settles down.

Carmageddon for Tesla, Fiat Chrysler, Hyundai, and Kia. But not for all automakers. Read…  Pickup Sales Boom, Cars get crushed, Tesla Deliveries Plunge

Second Crash Warning From The IMF – This Time It"s About Vol

Another week, another warning regarding financial crash scenarios from those keen minds at the IMF.

In “Here Is The IMF’s Global Financial Crash Scenario” last week, we highlighted the institution’s surprisingly candid discussion hidden away in its latest Financial Stability Report “Rising Medium-Term Vulnerabilities Could Derail the Global Recovery"…or as we paraphrased the IMF’s “politically correct way of saying the financial system is on the verge of crashing”.

As we noted previously, in the section also called "Global Financial Dislocation Scenario" because "crash" sounds just a little too pedestrian, the IMF uses a DSGE model to project the current global financial situation, and ominously admits that "concerns about a continuing buildup in debt loads and overstretched asset valuations could have global economic repercussions" and - in modeling out the next crash, pardon "dislocation" - the IMF conducts a "scenario analysis" to illustrate how a repricing of risks could "lead to a rise in credit spreads and a fall in capital market and housing prices, derailing the economic recovery and undermining financial stability."

This week the IMF has gone a step further, courting the mainstream financial media to publicise its warning about the dangers of historically low volatility and related short volatility strategies.

As The FT reports, The International Monetary Fund has warned that the increasing use of exotic financial products tied to equity volatility by investors such as pension funds is creating unknown risks that could result in a severe shock to financial markets. In an interview with the Financial Times Tobias Adrian, director of the Monetary and Capital Markets Department of the IMF, said an increasing appetite for yield was driving investors to look for ways to boost income through complex instruments.

“The combination of low yields and low volatility facilitates the use of leverage by investors to increase returns, and we have seen rapid growth in some types of products that do this,” he said.

It explains some of the short vol strategies that we’ve been expressing concern about for several years. To wit.

Mr Adrian’s warning comes amid increasing evidence that pension funds and insurance companies are venturing into riskier types of investments to gain income.

 

Some are also effectively writing insurance contracts against a market crash to pocket premiums. Last year the $14bn Hawaii Employees Retirement System said it was writing put options to boost its income, while other US pension schemes such as the South Carolina Retirement System Investment Commission and Illinois State Universities Retirement System have also hired outside managers to use option writing strategies. The IMF estimates that assets invested in volatility targeting strategies have risen to about $500bn, with this amount increasing by more than half over the past three years. Marko Kolanovic, head of macro, derivative and quantitative Strategies at JPMorgan, last month warned of “strategies that sell on ‘autopilot’”, and how risk management models that use volatility could be luring investors into taking on too much risk.

 

“Very expensive assets often have very low volatility, and despite downside risk are deemed perfectly safe by these models,” he wrote in a note to clients.

While we applaud this warning from the IMF, it’s absurdly belated and the short vol “horse” has long since bolted. Moreover, we think that the IMF is seriously under-estimating the magnitude of short vol risk in financial markets. Indeed, the IMF’s research department would do well to read the recent report from Artemis Capital Management which we drew investors’ attention to.

Artemis estimates that financial engineering strategies that are short vol, either explicitly or implicitly, amount to more than $2 trillion. However, both Artemis and the IMF are “on the same page” when it comes to what would unfold if there was a sustained spike in volatility. The FT continues...

The IMF believes that sustained low volatility increases incentives for investors to take on higher levels of leverage while causing risk models that use volatility as an important input to understate real levels of risk participants may be taking on.

“A sustained increase in volatility could then trigger a sell-off in the assets underlying these products, amplifying the shock to markets,” Mr Adrian said…

With equity implied volatility continuing to drop over the course of this year, investors who have bet that markets will remain tranquil have been rewarded. Yet the true quantity of complex products being sold that are linked to volatility of various assets is hard to ascertain due to such deals mostly being done in private. Regulators therefore find it difficult to map out the risks in the event of an unexpected market shock.

Mapping What Every State In America Is Best At

Company towns used to be a defining feature of the American economy. Nowadays, as Raul at HowMuch.net notes, thanks to globalization and offshoring, it is much harder to find employers that exert such influence over a small town (with a few notable exceptions).

That being said, specific industries still tend to grow in clusters and can dominate the economy of a particular region. To understand this new reality, we mapped the most important industries by state according to the U.S. Bureau of Economic Analysis, which takes into account an industry’s collective output as a percentage of the overall GDP. For simplicity, we excluded government jobs and real estate.

The result is one of the easiest snapshots of the U.S. economy you will ever find.

Source: HowMuch.net

The government groups companies into particular industries using the North American Industry Classification System (NAICS). Basically, someone looks at a company and decides where it belongs on a list of industries. This is more complex than it sounds, especially if a parent company holds many different unrelated subsidiaries (like Amazon), or when a business model strides the line between different industries (anyone care to debate if Airbnb is a technology company or in the hospitality industry?). We simply generated a color-coded map of the results of this debate.

You can immediately see some interesting groupings in the map.

 Computer & electronics companies dominate the West Coast, oil & gas remains ascendant in the Southwest, and insurance companies take the greatest market share in the Upper Midwest.

Take a look at the deep South, where you see a lot of red signifying the ambulatory healthcare services industry. This single industry dominates in 13 different states. Think about the Fortune 500 companies headquartered in these places, and it’s pretty easy to understand why these industries are so important. For example, Apple, Facebook, and Google are all headquartered in Silicon Valley in California.

Things tend to be much more diverse across the Northeast, where you see many different industries all grouped together. This is also easy to explain: it’s one of the most population-dense places in the country and it has the smallest states in terms of geography. This environment lets a lot of different industries grow together.

Factory towns may be a thing of the past, but it remains true today that similar businesses tend to grow and expand in areas with the same economic conditions.

This is true for less populous states like North Dakota and places with big cities too, like Colorado. If you’re looking for a job in one of these states, then our list gives you a good idea of where the biggest opportunities might be.

 

Trump And McConnell Make A "Truce Of Necessity" To Save Tax Reform

Inbetween firing off tweets and defending his decision to end cost-sharing payments to insurance companies, sending healthcare stocks sliding and eliciting accusations of sabotage, president Trump reportedly swallowed his pride and did something he’s been loath to do for months: he called Mitch McConnell.

Axios is reporting that, after months of frosty distance that was the subject of an anonymously sourced New York Times scoop back in August and has occasionally spilled into public view, President Trump picked up the phone yesterday and called the Senate Majority Leader ahead of what’s looking like a make-or-break weak for Trump’s legacy defining, narrative sustaining tax-reform program.

While it may come as a surprise to some - such as Goldman, which still says odds of a tax deal are well over 50% - Axios says Republican insiders privately believe the future of tax reform looks bleak. But if Trump and McConnell can patch things up and work together, even temporarily, the GOP has a better chance at avoiding an embarrassing legislative shutout that could imperil the republican majority in Congress.

The stakes are high: after the House passed its 2018 budget resolution a week and a half ago, unlocking the special budget provision that will allow the senate to pass its reconciliation bill with only 51 votes, the senate bill has yet to be called to a vote. It must pass the senate this week or risk tanking the centerpiece of Trump"s legislative agenda. As Axios glibly surmises, “no budget, no tax reform.” Trump and McConnell had a productive conversation on the agenda, and bonded over their joint effort to nominate and confirm conservative judges across the country. Trump was reportedly upbeat and mentioned a Kim Strassell column in The Wall Street Journal, "Scalias all the way down," giving the president credit for "remaking the federal judiciary."

Furthermore, Axios reports that Trump and McConnell communicate more frequently than many realize. They also are said to trade intel such as whip counts. The president and majority leader are scheduled to eat lunch together at the White House on Monday.

Still, as Axios concludes, the truce is one of necessity. It doesn’t represent a meaningful thaw in frosty relations between Trump and the Senate GOP leadership, who the president blames for the biggest defeat of his administration by failing to repeal and replace Obamacare. Of course, Steve Bannon’s “war” with the establishment, a war being waged with the goal of “saving” the Trump presidency, has added further strain to the relationship. But in a sign that fickle Senate Republicans might finally be falling in line, Susan Collins of Maine said on ABC’s “This Week” on Sunday that she was leaning toward a ‘yes’ on tax reform.

Will the market buy, literally and figuratively, this latest diplomatic detente? For the answer, keep an eye on the relative performance of high-tax corps (to the S&P). As we showed on Friday, following a brief burst of euphoria in the last days of September, the market has once again given up hope that Trump can pull off the biggest tax reform package in decades.

Democrat AGs From 18 States Sue To Keep Obamacare Subsidies, But Who Really Benefits?

It did not take long for democrats to respond to Trump"s executive order halting key subsidies known as Cost-Sharing Reductions or CSRs to insurers.

On Friday, just hours after the executive order was signed, Democratic attorneys general from eighteen states as well as Washington D.C., sued President Trump’s administration to stop him from scrapping a critical component of Obamacare - insurer subsidies that allow millions of low-income people pay medical expenses, even as Trump invited Democratic leaders to negotiate a deal. The states include: California, Connecticut, Delaware, Kentucky, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington state.

Trump smiles after signing an Executive Order to make it easier for Americans
to buy bare-bone health insurance plans and circumvent Obamacare rules

The suit follows the administration"s announced plans to end the payments next week; Trump said he would dismantle Obamacare “step by step.” His latest action raised concerns about chaos in insurance markets.  Frustrated by the failure of Republicans who control both houses of Congress to repeal and replace Obamacare, Trump’s action took aim at a critical element of Obama"s signature 2010 law. “As far as the subsidies are concerned, I don’t want to make the insurance companies rich,” Trump told reporters at the White House. “They’re making a fortune by getting that kind of money.”

On Saturday morning, Trump doubled down, tweeting that "Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!"

Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!

— Donald J. Trump (@realDonaldTrump) October 14, 2017

According to congressional analysts, the subsidies cost $7 billion this year and would rise to $10 billion for 2018.

As a reminder, under Obamacare, marketplace insurance companies are required to lower deductibles and prices for doctor’s visits and other services for many enrollees. Until now, the federal government has picked up the tab, reimbursing insurers about $7 billion this year alone.

As reported previously, Democrats immediately accused Trump of sabotaging the law. The suing AGs will ask the court to force Trump to make the next payment, although legal experts quoted by Reuters said the states were likely to face an uphill battle in court. “[Trump"s] effort to gut these subsidies with no warning or even a plan to contain the fallout is breathtakingly reckless,” New York Attorney General Eric Schneiderman said. “This is an effort simply to blow up the system.”

The new lawsuit would be separate from a case pending before an appeals court in the District of Columbia in which 16 Democratic state attorneys general are defending the legality of the payments.

If the subsidies vanish, low-income Americans who obtain insurance through Obamacare online marketplaces where insurers can sell policies would face higher insurance premiums and out-of-pocket medical costs. It would particularly impact lower-middle-class families whose incomes are still too high to qualify for certain government assistance.

Trump"s order impacts 10 million people who are enrolled in Obamacare through its online marketplaces, and most receive subsidies. Trump’s action came just weeks before the period starting on Nov. 1 when individuals have to begin enrolling for 2018 insurance coverage through the law’s marketplaces.

* * *

What is perhaps most notable is that according to CMMS data, is who benefits the most: as the map below shows, the share of marketplace enrollees receiving CSRs is the highest in southern - traditionally republican - states.

According to Bloomberg, in 2017, 58% of all marketplace enrollees received cost-sharing reductions (CSRs)—in some areas, almost all enrollees did. Insurers are still required to reduce costs for these roughly seven million enrollees. Without the reimbursement, insurers will have little choice but to hike rates or decide to not offer plans at all.

That said, Trump"s phasing out of CSRs isn"t a surprise to insurers, which had already assumed that CSR payments would end, and raised prices accordingly to cover predicted losses in states that allowed it. Some state insurance departments requested two sets of rates depending on the fate of the subsidies, while others required insurers to assume that CSRs would continue to be paid. Medica Health Plans recently exited North Dakota after state insurance officials there would not accept Medica’s high-rate, no-CSR request.

Furthermore, though insurers have already signed contracts with the federal government for 2018, the end of CSR payments gives them a potential exit clause. With less than three weeks until open enrollment, we’ll be watching closely to see if other companies choose to leave.

There is still a chance for a last minute deal: according to Reuters, Chuck Schumer expressed optimism about chances for a deal with Republicans to continue the subsidy payments. “We’re going to have a very good opportunity to get this done in a bipartisan way” during negotiations in December on broad federal spending legislation, “if we can’t get it done sooner,” Schumer told reporters.

Trump offered an invitation for Democratic leaders to come to the White House, while also lashing out at them. “We’ll negotiate some deal that’s good for everybody. But they’re always a bloc vote against everything. They’re like obstructionists,” Trump told reporters.

Trump, who as a candidate promised to roll back the law formally called the Affordable Care Act, received applause for his latest action during an appearance on Friday before a group of conservative voters. “It’s step by step by step, and that was a very big step yesterday,” Trump said. “And one by one, it’s going to come down, and we’re going to have great healthcare in our country.”

Previously, on Twitter he called Obamacare “a broken mess” that is “imploding,” and referred to the “pet insurance companies” of Democrats.

On Satuday morning, Trump tweeted that he is "very proud of my Executive Order which will allow greatly expanded access and far lower costs for HealthCare. Millions of people benefit!"

Very proud of my Executive Order which will allow greatly expanded access and far lower costs for HealthCare. Millions of people benefit!

— Donald J. Trump (@realDonaldTrump) October 14, 2017

Trump To Scrap Crucial Obamacare Insurer Subsidy

Just hours after signing an executive order that implicitly begins unwinding ObamaCare, Politco reports, citing two people familiar with the matter, that President Trump plans to cut off critical subsidy payments to insurers selling Obamacare coverage.

Earlier today, Trump signed an executive order expanding access to more loosely regulated insurance options with low premiums, a move that could undermine the ACA insurance markets.

“We’ve been hearing about the disaster of Obamacare for so long,” Trump said in signing the order at a White House ceremony. “For a long time, I’ve been hearing repeal, replace, repeal, replace.”

He then said that the order is "starting that process" to repeal ObamaCare.

It will be the "first steps to providing millions of Americans with ObamaCare relief."

And now, as Politico reports, the process appears to accelerating as Trump"s decision to end the payments, estimated at $7 billion this year, marks the president"s most aggressive move yet to dismantle Obamacare after months of failed GOP repeal efforts on Capitol Hill.

As Reuters notes, Trump has repeatedly threatened to stop the payments, which are made directly to insurance companies to help cover out-of-pocket medical expenses for low-income Americans enrolled in individual healthcare plans under Obamacare.

The move is likely to draw lawsuits and may put pressure on Congress to appropriate funding for the subsidies.

This latest move is likely to throw healthcare markets into chaos, and will infuriate Democrats - effectively closing the "Chuck and Nancy" channel of communications - leaving a deal to avert government shutdown on or after Dec 8th (when the currenct extension deal runs out) increasingly doubtful.

Betrayal! The Pervasive & Defining Crime Of Our Age

Let me apologize in advance for what may be an upsetting piece of writing for some of you. If you"re in a state of shock or exhaustion from recent events, perhaps you should skip this one.

I don"t offer this analysis in order to further distress anyone -- but until you understand what is happening and how that influences your psychological state, you"ll remain the emotional equivalent of a rag doll shaken to-and-fro by events.

Such understanding may not bring you to a place of calm acceptance. But it will set you free.

Betrayal

The recent acts of violence in the US, especially the horrific mass shooting in Las Vegas, are not arising out of a vacuum. Nor are the Brexit vote, the election of Trump, or the recent Catalonian vote for secession, random unconnected acts.

These -- and future similarly disruptive events sure to come -- are all arising out of the fact that we all have been betrayed.

For the purposes of this article, let"s define betrayal as:

the sense of being harmed by the intentional actions of a trusted person or institution. The emotional impacts of betrayal may include shock, a sense of loss, grief, damaged self-esteem, humiliation, self-doubt, shame, and anger.

We"re betrayed every time our trust is violated, in small ways or large. An example of a small betrayal might be hiding a frivolous purchase from your partner when you"ve both agreed to stick to a shared budget. A larger betrayal would be infidelity.

But betrayals aren"t limited to relationships between individuals. They can be perpetrated across groups, even nations. Like the enormous betrayal of trust committed when the US sent its military into Iraq on the basis of falsified ‘intelligence".

No matter the perpetrator, size and scope of a betrayal, the parties involved are only able to heal the damage done if there"s an open and honest dialog where the betrayer admits to their violations and atones openly and honestly. As discussed in much more detail in our excellent podcast with an experienced cognitive therapist, the betrayer must fully atone for their actions, face all consequences, and openly answer every question posed to them by the aggrieved.

If none of that happens, then then the animosity festers and is never ‘gotten over.’ Time does not heal that wound. It only offers a swampy breeding ground for a swarm of resentments.

In other words, if you find yourself increasingly distressed or angry (as I am) about the rampant violations of public trust in today"s world, it’s because you"re paying attention. It means you"re not crazy; you"re normal.

Betrayal Of The Public Trust

In the US, politicians deservedly enjoy a very low approval rating. Their words so rarely match their actions that it’s a too rare delight to find someone of character and conscience in DC.

Instead, we regularly see dirt bags like this:

This congressman is why people hate politics

Oct 4, 2017

Washington (CNN)

Pennsylvania Rep. Tim Murphy has had one hell of a last month.

In early September, the Republican House member admitted to an extramarital affair with a "personal friend"following the unsealing of divorce records that showed he had been involved in a relationship with Shannon Edwards, a forensic psychologist.

It got much, much worse on Tuesday when the Post-Gazette reported on a text message exchange between Edwards and Murphy in which she alleges he urged her to have an abortion.

Murphy"s personal foibles are not the point here. What is the point is that he is someone who has been an outspoken critic of abortion rights in his public life even while apparently being much more willing to consider it when it impacts him personally.

Murphy was a co-sponsor of legislation --passed in the House on Tuesday night-- that would make it illegal for women to abort a baby after the 20-week mark.

He has a perfect 100% score with National Right to Life, having voted with the organization on five key pieces of legislation, including the "No Taxpayer Funding for Abortions Act." As my former Washington Post colleague Aaron Blake expertly documents, Murphy was also touting his anti-abortion stance even as he was reportedly urging his mistress to seek an abortion.

(Source)

A sordid tale indeed. The essence of which is a powerful politician saying one thing but doing another. He loudly espoused strong family values and a staunch right-to-life voting record -- all while conducting an extra-marital affair and pressuring his mistress to get an abortion.

For the constituents who believed in this man, his deeds offer a profound betrayal. 

Tim Murphy represents the credo that the politicians in The Swamp live by: Do as we say, not as we do.

There are so many examples of prominent politicians and religious leaders saying one thing but doing nearly the exact opposite that one hardly knows how to begin listing them all. 

Heck, even "America"s Dad", Bill Cosby, has turned out to be a serial rapist.

All these betrayals have led to a rule I now live by: The more someone proclaims a strong moral position, the more I suspect them of secretly doing the opposite.

It’s time to refuse to put up with this any longer.

Institutionally Betrayed

But the scope of our victimization goes far beyond that conducted by individuals. The very institutions, both public and private, that we rely on are often fleecing us more than serving us.

The betrayals of the Catholic Church in covering up thousands of sexual assaults and tens of thousands of child victims are absolutely devastating.

Pharmaceutical companies quietly fund opposition to medical marijuana ballot initiatives because the data shows that the use of safe and effective marijuana seriously cuts into the extremely profitable sales of highly addictive and deadly opiates.

Car insurance companies rob their most loyal customers by slowly ratcheting up premiums in a scheme called “price optimization” in the industry. (This happened to me because I had not taken the time to shop around recently. I was horrified when I did. I wasn’t as badly screwed as some customers who paying up to 800% more than they should, but it still hurt.)

Of course hospitals with their captive hostage billing rackets are among the worst of the worst. So are private for-profit prisons, indecipherable 48-page phone bills, and Monsanto ghost writing “research” to obscure the probable cancer causing nature of Round Up while certain EPA staffers looked the other way.

In short, it’s difficult to have any sort of optimism about any large US corporations at this point. All of them are busy betraying us in ways large and small, every day, ranging from being evasive about the degree to which they snoop into our private affairs, to the ways in which they limit our access to the free flow of information by altering the results of popular online search algorithms.

In such an environment of pervasive betrayal, it’s difficult to maintain any sense of trust.

It turns out the best strategy is to trust nobody. Especially not a corporation with a large enough staff to segment their actions into enough ‘silos of deniability’, where no one person feels directly culpable for placing profits over people. “Hey Bill, as an exercise, why don’t you run an analysis that shows how many customers we might lose if we steadily increase their insurance rates, and then I’ll run it by legal and accounting…”

It’s time to refuse to put up with this any longer.

Sovereign Betrayal

The behavior of nations is no better on this front.

For example, in response to the highly-democratic Catalan referendum for independence, the EU bureaucracy has been busy betraying any commitments it had to protecting and advancing democracy. The EU Commission First Vice President said this:

STRASBOURG —The Spanish government’s “proportionate use of force” in Catalonia was necessary to uphold the rule of law, the European Commission declared on Wednesday.

As the European Parliament opened a debate on the Catalonia crisis, Commission First Vice President Frans Timmermans sided unequivocally with the Madrid government.

“None of us want to see violence in our societies,” Timmermans went on. “However it is a duty for any government to uphold the law, and this sometimes does require the proportionate use of force.”

(Source)

"Proportionate use of force?"

Wow. That"s an amazing perversion of language. Most of you have seen the pictures of peaceful people being ruthlessly clubbed by Spanish police -- simply because they exercised their right to vote. Here"s a graphic video of a woman"s fingers being methodically and cruelly broken as she lay on her back barely resisting (only watch it if you have a strong stomach).

Police broke my fingers one by one and touched my breasts

A woman dragged out of a polling station in Barcelona by police broke down in tears today as she claimed they had broken her fingers "one by one" and sexually assaulted her while they laughed.

Marta Torrecillas was filmed being violently removed from a school in the city"s upmarket Eixample area as Catalonia voted for independence yesterday.

The clip, captured at Paul Claris School, showed her being manhandled as she tried to walk past officers in full body armour on a day when footage of police brutality sparked outrage around the world.

Her dress was forced up around her thighs - leaving her exposed and humiliated - as she was dragged down towards the exit.She later claimed officers had touched her breasts and broken her fingers "deliberately, one by one".

(Source)

Her crime? Thinking she had the right to peacefully cast a vote. For that she was brutally assaulted, as were hundreds of other people. To which the EU VP merely said “it is a duty of any government to uphold the law.” 

Remember, it was the EU that voted to sanction and then bomb Libya because of concerns that Qaddafi was persecuting civilians (despite virtually no evidence this was the case) .

When your own government protects other people (as a pretext for violent regime change) but persecutes you, it is nothing short of a massive betrayal. Remember, anger, resentment, and humiliation are extremely difficult to ‘get over.’

It’s time to refuse to put up with this any longer.

Betrayal By The Elites

Here in October 2017, the stock and bond markets are in melt-up mode. This is a gigantic theft -- a deliberate transfer of wealth to those who already hold financial assets. The 1% is getting richer and richer while everybody without an already-significant pile of financial assets to their name languishes.

The central banks know exactly what they are doing and why. Stoking a massive boom in financial assets is benefiting their member banks, the ruling classes, the industry titans who fete them at swanky events like Davos, and the rich members of Congress.

Of course, this unfair wealth transfer is a massive betrayal of everybody who needs to save their hard-earned income for the future.

The central banks have vastly reduced the purchasing power of newly-earned money, making assets twice (or more) as expensive as they were just five years ago.  Anyone looking to buy a home, invest in a stock, or purchase a car, clearly can see this.

That’s inflation in every sense of the word. Inflation destroys wealth; it doesn"t grow it.

Here are a few simple questions to frame things.

• Would you rather receive 2% on a ten-year bond or 6%?


• Would you rather get 1 share of a given stock or 2 for the same amount of money?


• Would you rather get a dividend yield of 1.5% or 3%?

Obviously, you’d rather get more than less in every case. You’d take two instead of one for the same money whenever you could.

But the Federal Reserve has decided, using deeply flawed reasoning and no historical perspective, that simply jamming up the value of financial assets for those who already hold them is the best course of action.

Are you one of those who needs to save up for retirement? Tough luck. The Fed has decided you"re the loser in this story. You"ve been betrayed.

It’s time to refuse to put up with this any longer.

Generational Betrayal

One of the very worst forms of betrayal is that levied against an entire generation.

Today, we"re saddling young people with poor job prospects, high student debts, impossibly expensive housing stock, and a crumbling national infrastructure. All while asking them to shoulder the costs of the older generations underfunded entitlement and pension programs.

The statement to young people is clear: “We don’t care about you. We only care about us.”

It"s reprehensible. But that’s what massive betrayals are.

To just focus on housing in the US (and let’s be clear, housing is just as bad a situation in London, Stockholm, and a hundred other cities across the globe), the Federal Reserve has made higher home prices a specific policy goal. Its truly idiotic theory was that higher home prices make people feel richer, and that such people will borrow against the equity in their homes to spend more.

The reason this is idiotic is that a house that costs twice as much isn’t twice as valuable. As the market price goes up, the square footage and amenities remain exactly the same. The only real difference is that your property taxes and insurance costs have climbed, too. So in actuality,  it"s an even larger money drain than before.

Because assets generate cash flow and liabilities consume cash flow, it’s best to think of your primary residence as a liability and not an asset. But few people do that during a housing bubble like the one we"re in now. Just remember that all gains are speculative -- they only matter if you"re able to sell the house and invest the profits elsewhere. Otherwise, your "gains" can easily evaporate with the next market downturn.

The charts below show the astronomical prices homebuyer are faced with today. Here"s the national price index, which has propelled above it"s previous bubble high (remember: the bubble the triggered the Great Financial Crisis?):

(Source)

The view from a regional level often looks even more grim. Here"s what homebuyers in Dallas are experiencing:

Ouch!

Sorry next generation, the boomers driving the Federal Reserve"s policy have decided that you are expendable pawns. To protect their advantage, the older generation has decided to eat its young.

In other words, you’ve been betrayed.

It’s time to refuse to put up with this any longer.

*  *  *

In Part 2: Fighting Back -- A Call To Action, we detail the agency that we as individuals have in this story, to throw off the shackles of our victimhood and secure a prosperous future as protected as possible from the clutches of the betrayers. The betrayals will only come more fast and furious from here. This is expected. Dying systems with failing narratives are always messy and become increasingly desperate in their actions. Start taking steps to seize your future freedom now. Click here to read the report (free executive summary, enrollment required for full access)